Political Economy of the Debate on Industrial Growth and Stagnation in India: A Review

Slowdown of industrial growth, particularly since the late sixties, had attracted a great deal of scholarly attention in India. That ongoing scholarly discussions created a debate which was in marked contrast to the relative consensus that prevailed in the professional economic circles in the sixties. Many explanations had been offered to solve this debate. Those explanations, some mutually reinforcing, others mutually conflicting, have highlighted the following set of factors: poor agricultural performance despite the Green Revolution. relative price movements resulting in a shift in terms of trade against industry, unequal income distribution and resulting lack of demand, slowdown in import substitution, declining levels of public investment and increasing inefficiencies in the industrial structure resulting from governmental controls and policies. Now the obvious questions are: Why this incommensurability? How far do the available explanations account for the slow industrial growth? Are there other alternative explanations? On what yardsticks can we say that there has been a slowdown? Is the slowdown after 1965-66 a secular or cyclical process’? What does it mean for future policy’?[10] In this review I will try to answer these fundamental questions through analytical reasoning of different articles.